Quotulatiousness

April 18, 2022

Jen Gerson raises the banner of revolution against the Boomergeoisie

Filed under: Cancon, Economics, Government, Politics — Tags: , , , , , — Nicholas @ 03:00

In the free-to-read portion of last week’s weekend post from The Line, Jen Gerson channels the anger and frustration of the Millennial sans-culottes (or should that be the sans-maisons?) who are being systematically locked out of the housing market in Canada to protect the paper investments of the Boomer generation:

“Green suburbs” by Pierre Metivier is licensed under CC BY-NC 2.0

It’s come to the attention of several of the editors at The Line that some of you Boomers are mad at us. Or, more specifically, you’re mad at co-founder Jen Gerson who popped up a particularly scathing screed about the housing market earlier this week.

To wit:

    Our Boomer got his and that’s what matters. We have an entire government apparatus set up to protect that guy. The guy with the money and the guy who votes. The rich-on-paper people are happy, and as long as everybody gets a seat somewhere on this pyramid, then everybody else should be happy too.

We will admit that Gerson didn’t intend this column to come across as an anti-Boomer harangue. She intended it as an anti-government-housing-policy-that-favours-boomers-over-young-people rant, but we can understand why some of our more mature readers took umbrage. We would say we were sorry but … we’re mostly not. A few points:

Firstly, when we talk about macroeconomics and intergenerational equity issues, we are emphatically not talking about individuals. Nobody born between the years 1946 and 1964 is personally, individually morally culpable for the state of the housing market, or the economy, or climate change or any other tragedy of the commons.

[Otherwise, we’d be adopting the tactics of the CRT movement and talking about “Boomer Fragility” and other similar kafkatraps where denial is proof of guilt.]

If you bought a $40,000 house in the ’80s, you couldn’t possibly have known that that purchase would eventually lead to a six-figure real estate portfolio by 2020: you took a risk on the economy as it existed at the time, even struggling through a rough patch of high interest rates, and that risk paid off. No Millennial would have done any differently had we been in your position.

But, let’s be honest, if you are a Canadian Boomer, you were probably born in a country that hadn’t been bombed to the ground just before an historic economic boom so grand that it allowed unprecedented investment in your health, education, development and well being.

That doesn’t mean you didn’t also work hard, and suffer setbacks, as all humans must do over the course of a lifetime. Some of you made bad decisions, and some of you were unlucky, certainly. The bell curve tolls for us all. But you did get to play the game of life during a particularly fortuitous period of history. That period is now ending and the currents of history aren’t going to be as kind to your kids as they were to you (although let’s not kid ourselves. Canadian Millennials and Zers don’t have it so bad in the greater scheme of things, either.) Recognizing this — let’s call it Boomer privilege — doesn’t cost you anything. It doesn’t hurt you. It’s not a personal attack.

What we do find fascinating is the Boomers among our readership who take discussions about intergenerational equity and demographic advantage very, very personally. Forgive us for playing pop psychologist, but it almost feels like some of you park so much of your worth as human beings into your ability to earn wealth that to have someone point out that this wealth accumulation was helped by macroeconomic factors over which you had no control — luck, essentially — seems to be read as an attack on your sense of self, purpose, and identity. (Is this why so many of you struggle to retire? Is there a frisson of guilty conscience at play?)

That is … your issue. Being lucky isn’t an indictment of your character. We assume all of our Line subscribers are genuinely good people who knit little paw mittens for orphaned cats, okay? Otherwise, why else would you be here?

August 24, 2016

The Tragedy of the Commons

Filed under: Economics — Tags: , , , , — Nicholas @ 02:00

Published on 26 Jun 2015

In this video, we take a look at common goods. Common resources are nonexcludable but rival. For instance, no one can be excluded from fishing for tuna, but they are rival — for every tuna caught, there is one less for everyone else. Nonexcludable but rival resources often lead to what we call a “tragedy of the commons.” In the case of tuna, this means the collapse of the fishing stock. Under a tragedy of the commons, a resource is often overused and under-maintained. Why does this happen? And how can we solve this problem? Like we’ve done so many times throughout this course, let’s take a look at the incentives at play. We also discuss Nobel Prize Winner Elinor Ostrom’s contributions to this topic.

October 11, 2012

David Suzuki “owes economists an apology”

Filed under: Cancon, Economics, Environment, Media — Tags: , , , — Nicholas @ 09:09

In the Globe and Mail, Mike Moffatt examines Suzuki’s latest attack on the economics profession and finds it extremely unpersuasive:

Popular environmentalist David Suzuki has described conventional economics as a form of brain damage. In a documentary called Surviving Progress, he quotes a fictional economist by saying, “who cares whether you keep the forest — cut it down. Put the money somewhere else. When those forests are gone, put it in fish. When those fish are gone, put it in computers.”

Beyond tarring the economics profession, he displays a perplexing lack of understanding of basic economic concepts. First of all, none of the rules taught in undergraduate economics course advise the owner of a resource to deplete it as quickly as possible. Perhaps he was confused with the Tragedy of the Commons problem, where lack of private ownership causes a resource to be overused.

[. . .]

The idea that economists do not care about externalities is a strange one, given how prominently they are featured in economics textbooks. An externality is, simply put, a spillover effect. It is the unintended costs or benefits from a transaction or decision experienced by third parties (that is, they were external to the decision). It does not mean phenomena that are external to economic modelling or things outside the interest of economists. Since, as Dr. Suzuki points out, the world is full of externalities, the concept is crucial in economic research.

May 11, 2011

How resilient is the internet?

Filed under: Economics, Media, Technology — Tags: , , , — Nicholas @ 09:57

Richard Clayton summarizes a recent study by European Network and Information Security Agency (ENISA) on the internet’s ability to cope with disruptions. Among the ways the internet is vulnerable are:

First, the Internet is vulnerable to various kinds of common mode technical failures where systems are disrupted in many places simultaneously; service could be substantially disrupted by failures of other utilities, particularly the electricity supply; a flu pandemic could cause the people on whose work it depends to stay at home, just as demand for home working by others was peaking; and finally, because of its open nature, the Internet is at risk of intentionally disruptive attacks.

Second, there are concerns about sustainability of the current business models. Internet service is cheap, and becoming rapidly cheaper, because the costs of service provision are mostly fixed costs; the marginal costs are low, so competition forces prices ever downwards. Some of the largest operators — the ‘Tier 1′ transit providers — are losing substantial amounts of money, and it is not clear how future capital investment will be financed. There is a risk that consolidation might reduce the current twenty-odd providers to a handful, at which point regulation may be needed to prevent monopoly pricing.

Third, dependability and economics interact in potentially pernicious ways. Most of the things that service providers can do to make the Internet more resilient, from having excess capacity to route filtering, benefit other providers much more than the firm that pays for them, leading to a potential ‘tragedy of the commons’. Similarly, security mechanisms that would help reduce the likelihood and the impact of malice, error and mischance are not implemented because no-one has found a way to roll them out that gives sufficiently incremental and sufficiently local benefit.

Fourth, there is remarkably little reliable information about the size and shape of the Internet infrastructure or its daily operation. This hinders any attempt to assess its resilience in general and the analysis of the true impact of incidents in particular. The opacity also hinders research and development of improved protocols, systems and practices by making it hard to know what the issues really are and harder yet to test proposed solutions.

H/T to Bruce Schneier for the link.

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